It all started with Bitcoin, or rather its whitepaper, which first revealed the idea of a digital currency. A currency that would not be controlled by states or governments and would be decentralized, so that any outside intervention seemed almost impossible. This is Satoshi Nakamoto’s Bitcoin, which is now known worldwide and was also extremely profitable for a long time, especially for speculators. This currency can be generated through so-called crypto mining.
But even if bitcoin is, in a way, the epitome of a more or less functioning cryptocurrency that everyone knows at least from hearing about it, there is much more to this topic. Crypto mining is much more interesting than the currency itself. In theory, anyone can mine digital currencies and thus multiply them quite easily. In the beginning, this created a real gold-digging atmosphere, because, as with the prospectors back then, the gold was literally lying around on the street at the beginning. Crypto mining is actually very similar to gold, because in the beginning the currency is mined quickly and easily. Only towards the end does this become more difficult, as the large quantities have long since been grazed.
But what exactly is crypto mining and what does it take to mine digital cryptocurrencies yourself? Which safety-relevant aspects and measures are there and what should be paid attention to so that there are no difficulties and problems? This is exactly what today’s article is about, breaking down the topic of crypto mining and cryptocurrency. So let’s start with the basics.
What is Crypto Mining?
Crypto mining describes the mining of cryptocurrencies. While these are purely digital, they don’t just appear out of thin air, nor are they fully available. So they have to be mined first. This is done using mathematical functions that are very time intensive. This in turn means that crypto mining with a mining rig is usually not worthwhile in a private context. Due to the high power consumption and the high load, hardware is replaced again and again in continuous operation.
Crypto mining goes slower and slower the more currency has been mined in general. Moreover, there are now even special chips (ASIC) for cryptocurrency mining, which are much more effective. As you can see, the subject is complex and there is a lot to consider.
Cloud mining is when power is booked over a large infrastructure, which is then used to run crypto mining. Similar to cloud hosting, where you also only get charged for the computing time or similar. Here, however, you then pay for the service and are yourself responsible for checking whether the whole thing is still profitable for you as a miner. Most of the time it is simply because of the sheer mass. However, it makes more sense to set up a server farm and operate crypto mining on a large scale instead of just renting resources. For smaller and still unknown currencies, however, this can also be quite profitable.
Is crypto mining illegal?
The assumption that cryptocurrencies, i.e. Bitcoin and Co are illegal, is spreading on the Internet again and again. However, it is not based on any fact. Like real money, cryptocurrencies can be used for illegal activities. That’s right. However, this does not make the currency itself illegal. Mining is also an integral part of these currencies. At the beginning, this succeeds easily, but the more cryptocurrency is in circulation, the more difficult it is to mine.
The problem with this is rather that crypto mining eats masses of energy. Therefore, it is often not the mining that is illegal, but the energy procurement. Again and again there are and have been reports about tapped power lines and stolen chips to use them for crypto mining.
Mining is therefore not illegal either. It’s just often very inefficient. This means that the energy required to obtain the cryptocurrency exceeds the price of the currency being mined. And that then drives many miners to act illegally and, for example, steal electricity or obtain chips from dubious sources.
Blockchain is also often touted as a panacea for any problem, and we’ve looked at exactly how it works in a related article.
Are there any security risks?
Malware with integrated crypto mining is also becoming more widespread. Once installed on computers, it mines for cryptocurrencies in the background. To ensure that the user does not notice this afterwards, only part of the computing power is used for this purpose, so that infected computers can still be operated normally. However, the sheer number of infected systems makes it worthwhile, because it adds up to quite a lot in the end.
There is no real protection against these attacks. Block lists at least prevent common and well-known systems from being used. Also, as is often the case, not every download should be installed naively. Especially illegally downloaded software often contains much more than just the desired program. You should always be aware of this.
Crypto Mining and Cryptocurrencies
As is often the case, it’s about understanding and correctly interpreting security risks. Prevention is better than reaction! So awareness should be raised in the company about these things, as well as about similar fraud schemes or security risks. We looked at how to correctly and extensively sensitize employees to IT security in this article.
Those interested in the original Bitcoin whitepaper can read it here.